The Israeli military said its fighter jets had destroyed thousands of Hezbollah rocket launchers "aimed toward northern Israel and some were aimed toward central Israel."
The powerful Iran-backed Lebanese group countered that Israel was making "empty claims" of having thwarted an attack, and said its own operation for Sunday "was completed and accomplished".
Hezbollah's leader Hassan Nasrallah was due to speak on the "latest developments" at 6:00pm (1500 GMT), the group said.
Hezbollah has traded near-daily cross-border fire with Israeli forces throughout the Gaza war, in a campaign Hezbollah says is in support of Palestinian ally Hamas.
But fears of a wider regional conflagration soared after an Israeli strike on Beirut in late July killed top Hezbollah commander Fuad Shukr, prompting vows of revenge.
Hezbollah said its militants "began an air attack with a large number of drones" sent across the border, followed with "more than 320" Katyusha rockets launched at "enemy positions".
The Lebanese movement said its attack was an "initial response" to Shukr's killing, adding that it had "ended with total success", although the extent of the damage on the Israeli side was not immediately clear.
An Israeli military spokesman, Nadav Shoshani, said the fire from Hezbollah was "part of a larger attack that was planned and we were able to thwart a big part of it this morning".
The government declared a 48-hour state of emergency. By 7:00 am (0400 GMT) flights had resumed at Israel's main international airport after a brief suspension, the aviation authority said.
Military spokesman Rear Admiral Daniel Hagari told a media briefing that the Israeli strikes were meant "to remove the threats aimed at the citizens of Israel".
Lebanon's health ministry reported at least one dead in an Israeli strike on a vehicle in the country's south. No casualties were immediately reported in Israel.
US support
The United States, Israel's top arms provider, said it's military was "postured" to support its ally.
The Israel-Hamas war, triggered by Hamas's October 7 cross-border attack, had already drawn in Iran-backed groups like Hezbollah.
Fire across Israel's northern border has killed hundreds, mostly in Lebanon, and displaced tens of thousands of residents in both south Lebanon and north Israel.
Israeli Prime Minister Benjamin Netanyahu convened his security cabinet Sunday and vowed "to do everything to... return the residents of the north safely to their homes" after more than 10 months of violence.
Attacks in the Israel-Lebanon border area since October have killed more than 600 people on the Lebanese side, mostly Hezbollah fighters, but including at least 131 civilians, according to an AFP tally.
On the Israeli side, authorities have announced the deaths of at least 23 soldiers and 26 civilians, including in the Golan Heights.
Israeli Defence Minister Yoav Gallant's office said he had briefed his US counterpart Lloyd Austin on the situation.
Austin also spoke with Gallant and "reaffirmed the United States' ironclad commitment to Israel's defence against any attacks by Iran and its regional partners and proxies," a Pentagon spokesman said.
Gaza talks
The deaths of Shukar and Hamas political leader Ismail Haniyeh in Tehran ratcheted up concerns that Israel's war against Hamas in the Gaza Strip could spiral into a broader regional conflict.
Intense diplomacy in recent weeks has sought to avert a broader response to the killings of Shukr and Haniyeh, which was blamed on Israel, as Gaza mediators were making their latest push towards a ceasefire and hostage release deal.
A round of talks was due to be held Sunday in Cairo.
Hamas's October 7 attack on southern Israel resulted in the deaths of 1,199 people, most of them civilians, according to an AFP tally based on Israeli official figures.
Israel's retaliatory military campaign has killed 40,334 Palestinians in Gaza, according to Hamas-run Gaza's health ministry, which does not give details of civilian and militant deaths.
The UN rights office says most of the dead are women and children.
burs-ami/srm/dc
